MADISON — Tariffs that Madison Paper Industries is asking the U.S. government to place on imports of supercalendered paper from Canada could have an adverse affect on other jobs in Maine, but not if the U.S. government can be convinced to broaden its investigation into potentially illegal subsidies, according to U.S. Sen. Angus King, I-Maine, who toured the mill Friday.

The tariffs the mill is seeking would place duties on paper imports from Canada but are not limited to Port Hawkesbury Paper, which has been the target of allegations involving unfair subsidies.

The U.S. government also could impose duties on Catalyst Paper in British Columbia, which recently acquired a paper mill in Rumford that employs 700 workers; and Irving Paper Ltd. in New Brunswick, which employs more than 450 people in Maine.

King, who toured the mills in Madison and Rumford on Friday, told workers in Madison that he doesn’t plan to stop supporting efforts to put the tariffs in place. Instead, he said, he hopes to work with other members of Maine’s congressional delegation to ensure that jobs in Madison as well as in Rumford and at two sawmills owned by Irving are secure.

“”It doesn’t affect you guys at all,” he said. “It looks good and like you’re going to get the relief you’re looking for and that you should have gotten a long time ago. But we have to think about the people in Rumford and at Irving also.”

The Department of Commerce is expected to determine later this month whether the subsidies to Port Hawkesbury are illegal, and a final ruling on whether the tariffs will be imposed is expected in December.

King said Friday that if the tariffs are put in place, they could harm Catalyst’s Rumford Mill in Rumford and the Irving sawmills because of the way the international trade law is written.

King, as well as U.S. Sen. Susan Collins, R-Maine, and U.S. Rep. Bruce Poliquin, R-2nd District, have asked the U.S. Department of Commerce to include all Canadian paper producers in their investigation; but the department instead has decided to pursue an investigation of just two producers — Port Hawkesbury Paper in Nova Scotia and Resolute Forest Products in Quebec, according to a news release from King’s office.

If the investigation into Port Hawkesbury and Resolute finds that illegal subsidies have been used, tariffs will be imposed on all Canadian producers of supercalendered paper, King said.

“The way this law works, if they don’t investigate any other companies, they assume other companies in Canada are being subsidized too, even if they don’t know it,” King said. In July a preliminary ruling from the Department of Commerce indicated it was likely the subsidies were illegal, and the department put in place a temporary 20 percent tariff on shipments of the paper entering the U.S. from Port Hawkesbury Paper.

A 2 percent tariff was placed on paper from Resolute, according to Russ Drechsel, president of Madison Paper Industries. He said the other two supercalendered producers — Catalyst and Irving — are paying an 11 percent tariff, an average of the other two.

The tariffs could seriously affect those companies’ investments in Maine, including the Rumford Mill and two sawmills that Irving owns in Maine in Ashland and Dixfield, King said.

“We tried to get the trade commission to include them in the deal, but they wouldn’t do it,” he said.

He said he does not favor either paper mill and will continue to support Madison in its quest to have tariffs placed on imports from Nova Scotia.

“This won’t slow down the Madison phase, but if we can fix it at the same time, that would be good for Rumford and Dixfield and Ashland,” he said.

Drechsel said at the time the investigation originated, the Rumford mill was still owned by NewPage Corp., which has since sold it to Catalyst.

He said the company can pursue an “expedited review” of the subsidies after a final determination is made in the case in December.

“Madison has no opinion on what they should or should not do,” he said. “All we are asking is that everyone follow the rules and regulations that exist.”

Drechsel and other employees at the mill said Friday that the outcome of the Department of Commerce investigation is one of their top concerns when talking about the mill’s future. The other is the cost of energy in the Northeast.

Joel Hooper, a millwright who has worked in Madison for 24 years, said the subsidies are “one of the few obstacles that hinder us.”

“When I started working here, I knew it could be short-lived,” said Hooper, of Mercer. “This is one of the last bastions of manufacturing jobs, good quality jobs in Maine.”

Since January, the Madison mill has endured at least three production curtailments in which employees were temporarily laid off for a period of 10 days to two weeks. In January, the mill announced the first curtailment, in which nearly all of its 220 employees were sent home for two weeks without pay.

Drechsel said Friday that at least two other curtailments have occurred since then, though he could not say how many employees were affected.

In February the mill joined with Verso Corp.’s Duluth Mill in Duluth, Minn., to file a complaint with the U.S. International Trade Commission and the U.S. Department of Commerce seeking higher import duties on the paper made by Port Hawkesbury Paper in Nova Scotia.

All three companies produce supercalendered paper, a glossy paper that is often used for printing magazines.

The commerce department is scheduled to announce on Oct. 15 what the final duties would be on the paper imports if it is found that the subsidies have damaged U.S. producers.

A hearing before the International Trade Commission — which will be attended by Drechsel, King and Mike Croteau, the union president in Madison — on the effect the subsidies have had in Madison is scheduled for Oct. 22.

A final decision on the duties is expected in December.

“All we’re asking is that everybody play by the rules,” Drechsel said.

Rachel Ohm — 612-2368

[email protected]

Twitter: @rachel_ohm

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.